State Student Loan Legislation — Taking Student Loans Into Their Own Hands
States across America have been trying to pass Student Loan Borrower Bill of Rights to hold loan providers accountable for their actions.
The national student loan debt total is over $1.3 trillion. We haven’t seen much movement in how our country handles student loans. There are some government plans but our national student debt grows every day. States are having to take student loans into their own hands. In 2016, states like Michigan, Maine, Maryland, and Virginia have taken steps in one way or another to either help students realize the gravity of their loans or to soften the blow when the student loan storm finally hits.
In previous years, states have implemented their own rules and programs to help their residents deal with student loans. It feels like a trend that will keep moving forward.
In 2015, Connecticut became the first state to pass a borrower’s bill of rights. The bill launched a student loan investigation in the Connecticut Department of Banking and educational financial literacy courses for college students. The bill of rights will require student loan servicers to be licensed by the state banking department and explicitly prohibits services from defrauding or misleading borrowers, a problem that still exists in 2017. Massachusetts, Michigan, Washington, and Rhode Island have all filed similar state legislation.
In 2015 New York started the “Get on Your Feet” loan forgiveness program. The program pays for up to two years of federal student loan bills for state residents who graduated from a New York college or university after 2014. You also must earn less than $50,000 a year and be enrolled in an income-based repayment plan. This can be huge and allow borrowers to save money for those two years and create a foundation for themselves.
According to the National Conference of State Legislatures, California, Connecticut, Maine, Minnesota, North Dakota, Iowa and Rhode Island have all passed or drafted legislation that allows state residents to refinance their existing education debt at lower interest rates, often through state student loan authorities. If you don’t see your state listed, it’s good to reach out to your representatives. It is proven that representatives and senators are listening and trying to pass bills in favor of student loan borrowers.
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